December 18, 2019
United States:
U.S. Warns Europe That Trade Imbalances Are a 2020 Priority
“Fresh off a pair of wins with China and USMCA, President Donald Trump’s top trade official is shifting his focus toward to the biggest target of them all: the European Union. “We have a very unbalanced relationship with Europe,” U.S. Trade Representative Robert Lighthizer said Tuesday in another victory-lap interview, this one on Fox Business Network. “There are a lot of barriers to trade there and there are a lot of other problems that we have to address.” The warning shot comes at a precarious moment in transatlantic trade relations. The Europeans still harbor resentment with Trump’s decision to impose national-security tariffs on steel and aluminum, and his threat to slap tariffs on European cars and parts using the same justification.”
Europe:
U.K. Inflation Holds at Three-Year Low as BOE Decision Looms
“U.K. inflation held at its lowest rate in three years in November, providing ammunition for interest-rate doves as the Bank of England prepares to announce its final decision of the year. Consumer prices rose 1.5% from a year earlier, matching the smallest increase since November 2016, the Office for National Statistics said Wednesday. Economists had forecast a fall to 1.4%. The figures are nonetheless likely to reinforce the dovish tilt at the BOE, where policy makers Michael Saunders and Jonathan Haskel are expected to repeat their calls for lower interest rates on Thursday amid mounting signs of economic weakness. Inflation is running well below the BOE’s 2% target, and at less than half the pace of earnings growth. The central bank expects it to slow further next year and stay below target until the second half of 2021.”
Asia:
Japan’s Improved Growth Forecast Suggests BOJ Upgrade in January
“If history is anything to go by, an upgrade of the Bank of Japan‘s growth projection for next year is likely in January after the government nudged up its own economic outlook. Japan’s government now sees the economy expanding 1.4% in the year starting in April, compared with a projection in July of 1.2%, according to its latest forecasts released Wednesday. The government cited the stimulus package unveiled by Prime Minister Shinzo Abe earlier this month as a key factor for the faster growth. That’s twice the BOJ’s estimate from October. The central bank, which is expected to stand pat on policy at the end of its meeting on Thursday, isn’t due to revise its quarterly projections until January. Past forecasts for new fiscal years suggest the government and central bank are usually on the same page or thereabouts on growth at the start of each year.”
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